The copy and paste rumors in particular are picking up steam. Digg's Kevin Rose, a past clairvoyant with Apple predictions, claims to have the scoop on copy and paste. He makes unconfirmed claims that copy/cut and paste will be implemented in the 3.0 OS. The process, summarized on a Gizmodo blog is:

Cut and paste in 3.0:
- Users magnify or double tap a word to bring up cut and paste
- Pinch "boundaries" to select word(s); Rose called them "copy boundaries"
- Then you get option to cut, paste or copy

It is also rumored that MMS and video messaging will not be supported in the new OS. Rumors about these features have been propagating for the last couple weeks, but recent reports from inside sources indicate that these desirable features are unfortunately not to be.

Another top rumor is that new hardware may be in the mix. This rumor is fueled by the fact that every past x.0 iPhone OS release has corresponded to a new hardware release. Many are speculating that a 32 GB iPhone will be released as a 32 GB iPod Touch already exists. Further, some are going as far as to speculate that new processors/casing/etc. may be in the mix as well.

Finally, there are rumors about Apple tweaking how its applications run. Apps have been a pillar of the iPhone 3G's wild success, but currently only one app can be active at a time. According to Kevin Rose, the ability to have other apps running in the background will not be supported. Apple has long said this is the case due to memory limitations. However, the rumor is still popping up that Apple may support background operation for a limited number of apps.

Others are claiming Apple will institute a slightly different scheme -- push notifications. This feature would allow non-running apps like IM clients to receive and display notifications (i.e. a popup when a new IM is received). This would be one possible way of getting around the background limitations, possibly without using as much memory.

Ultimately, the iPhone 3.0 OS is Apple's chance to prove itself the superior competitor to the much anticipated Palm Pre phone. While it is seemingly increasingly unlikely that Apple will be able to kill the multi-touch Pre with litigation (Apple has a rather ambiguous patent on multi-touch, while the Pre is the first smart phone outside the iPhone to support it), Apple must seek to take it on by offering better features.

Whether Apple can deliver on such features is intimately attached to the capabilities of the new OS. However, at this point these capabilities remain unsubstantiated rumors, and cannot be fairly judged.

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yeah, but that wont be all that big a deal. The burden is/should be on XM to get an App made, not Apple. Not to mention there are already dozens of other radio-esque programs out there, ie Last.fm, Pandora, iheartradio, Public Radio (for the NPR fans) and more. Adding XM means you are just getting streaming versions of XM stations, which is really no big deal. And MLB is adding baseball audio streaming to their MLB App, which is going to be freaking awesome.

Why would they want to buy a company in such trouble? While they gain a decent number of subscribers, the costs to acquire them has been higher than the profits gained. That's why they are in such debt, amongst other reasons.